Debt Avalanche vs Snowball Calculator

Read the calculator result

When several debts compete for the same extra dollars, the repayment order can change interest cost and the date each account reaches zero. This calculator compares three balances while holding the total monthly payment budget constant. It shows the overall payoff month, interest, final payment, and the payoff month of each debt under both methods.

The avalanche directs available extra money toward the highest interest rate. The snowball directs it toward the smallest balance. Both continue the entered minimum payments on the other active debts. The calculator keeps freed payments in the plan after an account is cleared, so a method doesn’t appear cheaper simply because it receives more money.

The CFPB’s explanation of debt reduction strategies describes these two approaches and their different emphasis: expensive debt versus visible progress on smaller balances. The numbers below compare their arithmetic under stated assumptions. They don’t measure which routine you’ll maintain or determine priorities among overdue, secured, or legally sensitive obligations.

Debt payoff strategy: collect three balances and a sustainable budget

Enter the opening balance, fixed annual interest rate, and fixed monthly minimum for debts A, B, and C. Use the same date for all balances where practical. If you have only one or two debts, leave the unused balances at zero. A paid-off balance doesn’t receive another payment merely because an old minimum remains in its input field.

The minimum fields are dollar assumptions that stay fixed while an account remains active. They don’t reproduce an issuer’s percentage-of-balance minimum, changing floor, promotional rate, or daily interest method. If a statement minimum falls as the balance declines, this projection represents continuing the entered dollar payment rather than following every future statement minimum.

The total budget includes all three minimums and any extra amount. Don’t enter only the extra payment. In the example, minimums total $295 and the overall budget is $500, leaving $205 to allocate initially. Use the household budget calculator to check whether the proposed amount fits your other planned cash needs before interpreting a faster payoff as achievable.

Understand the monthly allocation rules

At the start of a modeled month, the calculator ranks active debts using their opening balances. Avalanche sorts by descending interest rate, breaking a rate tie with the smaller balance and then A, B, C. Snowball sorts by ascending balance, breaking a balance tie with the higher rate and then the account letter. These tie rules make repeated calculations reproducible.

Next, each opening balance accrues one month of interest. Its entered minimum is paid, capped at the amount actually owed. The remaining total budget then moves through the chosen priority order. If the first target needs less than the available extra, the remainder reaches the next debt during that same month. Money isn’t left idle until the following installment.

The budget remains constant as debts disappear. An account that once received $75 no longer needs that minimum after payoff, but the $75 remains available to the other accounts. Only the final overall payment can fall below the full budget. This rollover convention is central to the comparison and explains why a sum of original minimums can eventually become a substantial payment on the last balance.

How the calculator works

For an account with opening principal B and an entered annual interest rate a, monthly modeled interest is B × a ÷ 1,200. Amount owed before payment is principal plus that interest. Closing principal is the amount owed minus the payment assigned to that account. The process repeats until all three balances are zero.

Total interest is the sum of the monthly charges across all accounts. Total paid equals opening debt plus accumulated interest because the model includes no additional fees or borrowing. Avalanche interest savings equals snowball interest minus avalanche interest. A positive result means avalanche costs less under the entered assumptions; the calculator doesn’t convert that difference into a credit-score prediction.

Calculations retain precision beyond the displayed cents. Real statements may round interest and payments differently, use actual days, or apply transactions on different dates. Compare the projection with your first few statements and revise the assumptions when a material difference appears. A displayed payoff month is a model result, not a creditor’s dated payoff quote.

Debt payoff strategy calculator example: three debts and $500 a month

Assume debt A is $6,000 at 22% with a $180 fixed minimum, B is $2,500 at 15% with a $75 minimum, and C is $1,000 at 8% with a $40 minimum. The combined opening debt is $9,500. Both strategies receive $500 each month until their final capped payment.

Avalanche saves $319.74 and finishes one month earlier. Snowball clears the smallest account much sooner, in month five. Those are different benefits: a lower total cost and an earlier individual payoff. The comparison makes both visible without assuming that everyone values them equally.

In month one, A accrues $110, B $31.25, and C approximately $6.67. Avalanche pays A $385, B $75, and C $40. Snowball instead pays A $180, B $75, and C $245. Both reduce total debt to approximately $9,147.92 that month, because both incurred the same opening interest and paid the same $500. Their later interest paths diverge as the allocation changes future balances.

Test a larger budget without changing the debts

Increase only the total monthly budget to $700. Both methods now finish in month 16, but their costs still differ. Avalanche incurs $1,159.92 of interest and snowball $1,406.60, a $246.68 difference. Matching payoff months therefore doesn’t mean matching total interest or matching final installments.

Under this larger budget, avalanche clears A in month 12, B in month 15, and C in month 16. Snowball clears C in month three, B in month eight, and A in month 16. The larger payment compresses both schedules. Check whether that extra $200 is recurring capacity or a one-time windfall; this interface applies it every month and has no field for an isolated bonus payment.

As a useful arithmetic check, set all three rates to zero while keeping the $9,500 balance and $500 budget. Both paths require 19 payments and charge no interest. Different account ordering can still change individual payoff dates, but it can’t create an interest saving when no balance accrues interest.

Read the chart and check the input boundaries

The chart follows total remaining debt through the later payoff date. A line reaching zero stays there; no further installment is charged after that strategy finishes. The accompanying table separates remaining balance, cumulative interest, and the payment for each sampled month. Use the separate account-payoff table to see progress that a combined balance line can conceal.

The total budget must cover the entered minimums on initially active debts. Each active minimum must also exceed that debt’s first-month interest. This conservative validation keeps every account amortizing even before extra money reaches it. It doesn’t imply that a creditor’s actual minimum must satisfy this particular simplified model or that a rejected real account is invalid.

A plan that needs more than 600 modeled months is rejected rather than presented as a meaningful near-term forecast. Check the balance, percentage units, and payment assumptions. A 22% rate belongs in the rate field as 22, not 0.22. Adding new spending, fees, or a variable promotional expiry requires a different model or a fresh scenario.

Turn the comparison into an account-level plan

Keep the letters connected to real account names in your own records, and record due dates separately. The calculator’s single monthly cycle doesn’t schedule payments or ensure they arrive on time. The CFPB debt workbook provides a debt inventory and action-plan structure that can help organize the information behind your inputs.

Confirm how each creditor applies extra money and whether fees or contractual restrictions matter. Recheck balances after a payoff so a tiny residual charge doesn’t surprise you. For one revolving balance, the credit card payoff calculator offers a simpler fixed-payment view. The pay debt or save comparison addresses a different question: where the same extra cash goes between repayment and savings.

Debt payoff strategy calculator questions

Does the calculator make or arrange payments?

No. It runs an illustrative schedule locally from your entries. Payment instructions, automatic transfers, statement due dates, account permissions, and creditor agreements remain separate. Keep enough information to reproduce the calculation without entering account numbers or other sensitive identifiers.

Why can two debts finish in the same month?

The remaining budget rolls to the next account immediately when a target is paid off. Minimum payments on other debts also continue. Several small remaining balances can therefore be cleared during one modeled month, as happens to B and C in the default avalanche example.

Can I use a changing minimum-payment formula?

This tool deliberately holds each entered dollar minimum fixed. Use the minimum credit card payment calculator for a single-balance declining-minimum scenario. Don’t interpret a three-debt fixed-minimum comparison as a forecast of every future statement requirement.